The ministry of heavy industries had directed Hero Electric to refund claimed subsidies with interest. Settlement talks with authorities have failed to evince any results so far. A bankruptcy court in New Delhi has admitted Hero Electric Vehicles for a corporate insolvency resolution process in an application filed by its operational creditor Metro Tyres. The National Company Law Tribunal appointed Bhoopesh Gupta as interim resolution professional for the EV maker.
"We are of the view that the corporate debtor (Hero Electric Vehicles) has not been able to raise a plausible contention regarding the pre-existence of 'dispute' between the parties," observed a division bench of judicial member Bachu Venkat Balaram Das and technical member Atul Chaturvedi. "Hence, the present petition filed under Section 9 of the IBC, 2016 ought to be admitted," said the bench in its order of December 20.
In this case, New Delhi-based Metro Tyres was a supplier of tyres and tubes to Hero Electric.
Hero Electric MD Naveen Munjal did not respond to ET's queries.
"The management (of Hero Electric) has the option to challenge the order before the appellate tribunal or it can settle the dispute with the operational creditor before the formation of the committee of creditors," said Ruchi Khatlawala, a partner at law firm Little & Co.
Hero Electric, earlier a front-runner in the electric two-wheeler space, has been embroiled in controversies since allegations surfaced of the company wrongfully claiming subsidies under the government's flagship incentive scheme FAME II (Faster Adoption and Manufacturing of Electric Vehicles) without meeting the specified localisation norms.
The ministry of heavy industries had directed Hero Electric to refund claimed subsidies with interest. Settlement talks with authorities have failed to evince any results so far. Last month, the Serious Fraud Investigation Office sealed Hero Electric's office premises in Gurugram over violation of FAME-II EV subsidy norms. The company's manufacturing facility is shut for more than a year. Dealers have claimed the company has not paid dues of INR 400-500 crore.
Metro Tyres, in its petition, argued that it had approached the tribunal after Hero Electric defaulted on its dues of about INR 1.85 crore.
